CAG Flags Irregularities by TSIIC in Land Allotment

Hyderabad: The Comptroller and Auditor General of India (CAG) has flagged serious irregularities in land allotment and acquisition practices of the Telangana Industrial Infrastructure Corporation Limited (TSIIC) during the previous BRS regime, pointing to substantial losses to the state exchequer. The audit findings, covering the period up to March 2022, were presented in the Legislative Assembly on Monday.

The report noted that Telangana’s Industrial Policy Framework, introduced in 2014, aimed to promote private sector participation, with the government acting as a facilitator. The TSIIC was entrusted with developing and maintaining industrial infrastructure across the state. However, the audit found serious deficiencies in execution, planning, and monitoring.

A major concern highlighted was the prolonged delay in land acquisition for key projects such as Hyderabad Pharma City and the National Investment and Manufacturing Zone (NIMZ) at Zaheerabad. The delays, extending beyond five to seven years, adversely impacted projected investments and employment generation.

Financial mismanagement was also flagged, as TSIIC diverted Rs 317.49 crore from a Rs 725 crore loan obtained from Housing and Urban Development Corporation (HUDCO) Limited for NIMZ land acquisition towards unrelated expenses, including loan repayments and other projects.

The audit revealed that alienation orders for 23,717 acres, including a substantial portion of government land, remained pending — some cases dating back to 1974. Despite the absence of finalised alienation proceedings, TSIIC proceeded to allot land and execute sale deeds based on tentative valuations. Additionally, the corporation failed to conduct periodic surveys of its land bank, which spans over 53,000 acres.

Instances of land allotment at concessional rates in violation of established policies were also documented. At a hardware park in Mamidipally, 20 acres were allotted at Rs 40 lakh per acre, significantly lower than the prevailing rate of Rs 2.13 crore, resulting in undue benefits. Similarly, an unauthorised committee allocated over 165 acres to multiple entities, extending financial advantages running into hundreds of crores.

In another case, land far exceeding actual requirements was allotted at concessional rates, leading to financial losses. At Gachibowli Industrial Park, prime land was allotted below the market value to mobile manufacturing firms, causing revenue losses. The audit observed that several allottees had not established units even after five years, yet penalties were neither imposed nor land resumed.

The report also pointed to deviations in assessing land requirements. At Plastic Park, Mankhal, excess land was allotted beyond the evaluated needs, benefiting allottees financially. In another instance, land resumed after decades was restored at a nominal charge, contrary to regulations, resulting in significant losses to the corporation.

Further irregularities were noted in phased allotments, where land reservation charges were calculated at concessional rather than prevailing rates, and even those dues remained unrecovered. Infrastructure development under central schemes showed poor progress, with only one out of 11 sanctioned projects completed, and that too after considerable delay. Long-pending environmental infrastructure, such as Common Effluent Treatment Plants in pharma clusters, remained unimplemented.

The audit highlighted a worrying trend of underutilisation of allotted land. Of the 1,642 industrial units allotted land, a majority had either not commenced operations or their status remained unclear. Delays in implementation ranged from a few years to several decades, leading to large tracts of land lying idle. Despite this, TSIIC did not take adequate steps to cancel allotments or reassign plots to prospective entrepreneurs.

Additionally, infrastructure created at public expense, including research and quality control facilities, remained unused for extended periods. Governance mechanisms within industrial areas were also found lacking, with service societies either not constituted or not functioning effectively in most cases.

The audit further revealed diversion of Rs 500 crore from Industrial Area Local Authority (IALA) funds for purposes beyond their intended scope, raising concerns over financial discipline and transparency.